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June 18, 2008

Politically Correct

I recently got an e-mail from a reader that warrants further comment. Apparently, he took issue with a small comment in my April column about how advisors can prosper in the current bear market. I'll let him speak for himself: "I was rather shocked and dismayed to read the leader on the Fast Track column... I'm not sure what you were alluding to with your "Bush Bull Market" comment. Maybe and hopefully it was a satirical spin on the current administration's insane economic and foreign policies that are leading this country into the worst economic crisis this country has seen since the Great Depression."

I'm not commenting on his politics here. That's not my job. I'm not a political writer; I'm a business consultant to independent advisors who writes a column to help them run their practices more successfully. But I am concerned with the current trend in our self-indulgent society that seems to encourage people to let their political beliefs cloud their view of reality, especially when it spills over into their financial advice.

In this case, the simple fact is that on October 7, 2002, the Dow Jones Industrial Average stood at 7,422; and five years later, on October 9, 2007, the DJIA closed at 14,164. That, folks, is a bull market by any objective standard.

Since it happened on George W. Bush's watch (perhaps coincidentally), it's customary to call it the "Bush bull market." We can debate about whether the President had anything to do with the market, the effect of Bush's policies on the economy, the effect of the war on oil prices, yadda, yadda, yadda.

But I don't get paid for my opinions on political issues, and the fact is that financial advisors don't either: they get paid to (among other things) look objectively at the current economic situation and assess the prospects for the financial future of their clients. The politics of their clients might occasionally be relevant, say, if they want to restrict their investment holdings in accordance with their beliefs. But the political beliefs of professional advisors--like their religion and their race--have no place in their objective advice.